Kyushu Railway : Integrated Report 2021

JR Kyushu Group Integrated Report

2021

What we aim to be

A corporate group that invigorates Kyushu, Japan, and Greater Asia with safety and service as its foundation

The JR Kyushu Group's first and central business is our railway network throughout Kyushu. Over the years, our business has expanded into areas such as condominiums, construction, shipping, hotels, and station buildings. These areas complement our railway business, allowing us to achieve a synergy between our various areas of business. We are dedicated to contributing to the sustainable development of Kyushu through city-building and community development initiatives that leverage the distinctive characteristics of local communities, centering on safe and reliable mobility services.

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History of the JR Kyushu Group	The Path to Achieving What We Aim To Be	The JR Kyushu Group's Aims	Sound Corporate Management	Source of Value Creation	Building a Sustainable Society	Data Section
History of Value Creation Initiatives	Value Creation Story	Message from the President,	Ensuring Transparent and Fair Management	Safety, Service,	Addressing Environmental Issues	Financial Highlights, Non-Financial Information
At a Glance	Value Creation Process	Local Community Invigoration, Pandemic Strategies	Strengthening Risk Management, Rigorous Compliance	Development of Human Resources		Financial Information
	The JR Kyushu Group's Corporate ESG	Climate Change Adaptation, Message from the CFO	Extensive Communication with Stakeholders			Investor Information, Consolidated Subsidiary Information

Contents

		History of the JR Kyushu Group
	5	History of Value Creation Initiatives
	7	At a Glance		Sound Corporate Management
	The Path to Achieving What We Aim To Be	32 Ensuring Transparent and Fair Management
9
Value Creation Story		43 Strengthening Risk Management, Rigorous Compliance
10 Value Creation Process		46 Extensive Communication with Stakeholders
11 The JR Kyushu Group's Corporate ESG		Source of Value Creation
The JR Kyushu Group's Aims	48 Safety
14 Message from the President		Data Section
52 Service
18 Local Community Invigoration	56 Development of Human Resources		67 Financial Highlights
23 Pandemic Strategies		Building a Sustainable Society		68 Non-Financial Information
25 Climate Change Adaptation	69 Financial Information
27 Message from the CFO		62 Addressing Environmental Issues	75	Investor Information, Consolidated Subsidiary Information

Editorial Policy

Forward-looking Statements

This report was developed for the purpose of imparting a deeper understanding of the JR Kyushu Group's operations (Kyushu Railway Company (JR Kyushu) and related com- panies) to our stakeholders. The report was prepared with reference to the International Integrated Reporting Framework of the International Integrated Reporting Council (IIRC)* and the Guidance for Integrated Corporate Disclosure and Company-Investor Dialogues for Collaborative Value Creation from the Ministry of Economy, Trade and Industry. The ed- itors' aim is to communicate financial and non-financial information, such as management policies, business strategies, and ESG information, to readers in a concise manner. More detailed information is available on the corporate website for those who are interested.

• A private-sector organization established in 2010 by entities such as private-sector com- panies, investors, accountants' organizations, and government institutions with the aim of developing an international corporate reporting framework.

This report contains forward-looking statements, including future outlooks and objectives of the JR Kyushu Group. These statements are judgments made by JR Kyushu based on information, projections, and assumptions available at the time of the document's cre- ation. Please be advised that actual operating results could greatly differ from the statements in this document due to the effects of the economic situation both inside and outside Kyushu and Japan as a whole, real estate market conditions, the progress of our projects, changes in laws and regulations, and a wide range of other risk factors. The purpose of this document is not to solicit the purchase of JR Kyushu's stocks or other financial instruments in Japan. In addition, this report does not constitute an offer of securities in the United States. Based on the American Securities Act of 1933, offering or selling securities in the United States is not permitted, with the exception of cases where a company is registering securities or is exempt from registration. In cases where securities are being publicly issued in the United States, an English prospectus created on the basis of the Securities Act of 1933 will be used. The prospectus states that said securities may be acquired from an issuing company or seller and contains detailed information and financial statements on issuing companies and their management.

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History of the JR Kyushu Group

• History of Value Creation Initiatives
• At a Glance

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History of the JR Kyushu Group	The Path to Achieving What We Aim To Be	The JR Kyushu Group's Aims	Sound Corporate Management	Source of Value Creation	Building a Sustainable Society	Data Section
History of Value Creation Initiatives	Value Creation Story	Message from the President,	Ensuring Transparent and Fair Management	Safety, Service,	Addressing Environmental Issues	Financial Highlights, Non-Financial Information
At a Glance	Value Creation Process	Local Community Invigoration, Pandemic Strategies	Strengthening Risk Management, Rigorous Compliance	Development of Human Resources		Financial Information
The JR Kyushu Group's Corporate ESG	Climate Change Adaptation, Message from the CFO	Extensive Communication with Stakeholders			Investor Information, Consolidated Subsidiary Information

Historyof Value Creation Initiatives	The JR Kyushu Group's Corporate DNA
			JR Kyushu was established following the breakup and privatization of Japanese National Railways in 1987.
			At the time of privatization, railway operations were around ¥30 billion in the red. We took steps to improve
			income and expenditure, but were also aware that we could not rely on our railway operations alone. We took
			up the challenge of various other businesses as well and aimed for growth.
		1989
		•Began selling MJR Sasaoka,our first condo-
		minium complex
		•Established JR Kyushu Fast
		Foods Inc.			2000
			1990		1995	•Opened Amu Plaza Nagasaki and JR
				Kyushu Hotel Nagasaki
	Kokura		•International passen-		•Opened Huis Ten Bosch JR ANA Hotel
		ger ship route estab-		•Established JR Kyushu Retail, Inc.
					2001
			lished Beetle 2 began sailing
	Hakata			•Established JR Kyushu Food Service Inc.		•Opened Umaya in Akasaka,
		from Fukuoka to Busan
	Fukuoka Prefecture					Tokyo
	Saga Prefecture	Oita Prefecture	(2 hours 55 minutes)
		Oita	•Opened Shato Hanten,
	Saga
Nagasaki	Kumamoto		a luxury Chinese restaurant		1998
Prefecture
Nagasaki	Prefecture				•Opened Station Hotel Kokura
	Kumamoto
		Miyazaki Prefecture			1997
			1992		•Opened Shin-Kokura Station building (Amu Plaza)
		Miyazaki	•Established Train d'Or Ltd.
	Kagoshima-Chuo		•Opened JR Uchino Country Club
	Kagoshima		•Opened Hotel Blossom Fukuoka
	Prefecture
							2001
							•Released new 2-ride and 4-ride conces-
							sion tickets for limited express trains
Established Kyushu Railway		1991				•Commenced electric services on
				Sasaguri Line and Chikuho Main Line
Company (JR Kyushu)		•Commenced electric service on	1995		(Fukuhoku Yutaka Line) (all of the Sasa-
	the Omura Line
1987			•First fare revision		guri Line and between Orio and Keisen
	(Haiki to Huis Ten Bosch)			on the Chikuho Main Line)
1990			2000
Railway business			1996	2000
					•Opened Miyazaki Airport	•Completed the general operations system
					Line	JACROS
		1988		1993		1999
		•Began operating Yufuin no Mori express
		•Launched Stationmaster's Rec-	•Held first JR Kyushu Walking
		1987		ommended Hot Springs, a new	event
			travel product		•Commenced electric service on
		•First revision of timetable
			(Ekicho Osusume no Yu)
				Hohi Main Line

(between Kumamoto and

Higo-Ōzu)

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